NEW YORK — Snapchat parent Snap Inc. started its official bid to go public last Halloween. Now investors get to learn whether they’re in for a trick or a treat.

Snap passed its first major test on Wall Street on Wednesday, when the company priced its initial public offering of 200 million non-voting shares at $17 each. That’s above the expected range of $14 to $16. Snap is expected to start trading on the New York Stock Exchange on Thursday under the symbol “SNAP.”

Snap’s IPO is one of the most anticipated for a technology company since Twitter’s stock market debut in 2013. That, in turn, had created the biggest stir since Facebook took its first bow on Wall Street in 2012. Twitter is now valued at $11 billion, while Facebook is $395 billion. Snap’s pricing values the Los Angeles company at $24 billion.

Snap’s Snapchat app is best known for disappearing messages and quirky facial filters for jazzing up selfies. It’s popular with teenagers and younger millennials.

While Facebook launched in the era of desktop computers and Twitter in text-based mobile, Snapchat jumped straight to photos and videos. In a sense, it’s ahead of the game.

But its user growth has slowed in recent months.

Advertisement

Blame Facebook. Growth slowed to a crawl since Facebook’s Instagram cloned Snapchat’s “stories” in August. With the feature, photos and videos shared by users play in a loop for 24 hours, then disappear. The feature helped Snapchat recover from stagnant growth before, but now it’s no longer unique to Snapchat. After adding 36 million daily active users during the first half of last year, Snapchat picked up just 15 million in the second half.

The number of people downloading Instagram’s app has been accelerating during the past six months, suggesting a gradual shift away from the Snapchat app, based on an analysis financial advice site ValuePenguin did of activity in Apple’s app store.

While the higher-than-expected pricing looks good for Snap, its troubles aren’t over.

“What that number means for the longer term – very little,” said Chi-Hua Chien, managing partner at Goodwater Capital who originated the VC firm Accel Partners’ investment in Facebook and later invested in Twitter while at another firm.

Twitter, for example, shot up nearly 73 percent on its first trading day and now trades well below its IPO price.

Facebook, meanwhile, saw its stock decline sharply for a few months after going public. Now, it’s trading more than three times its IPO price, near a record high.


Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.